USA Gymnastics President and CEO Kerry Perry, middle, watches the U.S. Gymnastics Championships, Thursday, Aug. 16, 2018, in Boston. (AP Photo/Elise Amendola)

Abuse settlements force USA Gymnastics to file for bankruptcy

The organization filed a Chapter 11 bankruptcy petition on Wednesday as it attempts to reach settlements in the dozens of sex-abuse lawsuits it faces.

USA Gymnastics is turning to bankruptcy in an effort to ensure its survival.

The embattled organization filed a Chapter 11 bankruptcy petition on Wednesday as it attempts to reach settlements in the dozens of sex-abuse lawsuits it faces and to forestall its potential demise at the hands of the U.S. Olympic Committee.

USA Gymnastics filed the petition in Indianapolis, where it is based. It faces 100 lawsuits representing 350 athletes in various courts across the country who blame the group for failing to supervise Larry Nassar, a team doctor accused of molesting them.

Kathryn Carson, who was recently elected chairwoman of the board of directors, said the organization is turning to bankruptcy to speed things up after mediation attempts failed to gain traction.

“Those discussions were not moving at any pace,” Carson said. “We as a board felt this was a critical imperative and decided to take this action.”

The filing does not affect the amount of money available to victims, which would come from previously purchased insurance coverage, she said. Carson said the insurance companies “are aware we’re taking this action and our expectation is they will come to the table and pay on our coverage.”

Carson added: “This is not a liquidation. This is a reorganization.”

Read more: USOC moves to shut down USA Gymnastics after Nassar scandal

Read more: U.S. gymnastics doctor sentenced to 40 to 175 years in prison

One that USA Gymnastics hopes will buy it enough time to fend off the USOC’s intent to decertify it.

The USOC on Nov. 5 took steps to remove USAG as the sport’s governing body at the Olympic level — a step that’s taken only under the most extreme circumstances. In an open letter to the gymnastics community, USOC CEO Sarah Hirshland said “you deserve better,” and that the challenges facing USA Gymnastics were more than it was capable of overcoming as currently constructed.

Carson said the legal manoeuvring Wednesday delays the USOC’s efforts to strip its designation as a national governing body.

“We always have a dialogue going with them and intend to make it clear with them we have a lot to talk about and we want to keep that going,” Carson said.

USOC spokesman Patrick Sandusky disagreed.

“While we fully understand that USAG believes this restructuring will begin to solve deficiencies we’ve identified, the filing does not impact our Section 8 complaint and that process will move forward,” Sandusky said.

Will Graves, The Associated Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Victoria byelection will take place in December

City council approves additional $350,000 in funding

Provincial police watchdog opens investigation after man found dead in Victoria cells

The man was arrested by North Cowichan/Duncan RCMP on Sept. 28

Light the City takes root in Greater Victoria as pandemic cancels holiday favourite parade, convoy

Five weeks of drive-thru events fill void of IEOA annual Truck Light Convoy, Santa Claus Parade

B.C. starts October with 82 more positive COVID-19 tests

10,899 tests a record for a single day, Bonnie Henry says

POLL: Have you requested a mail-in ballot for the B.C. provincial election?

British Columbians head to the polls on Oct. 24 but early indications… Continue reading

B.C. watchdog clears police, says injuries Island man suffered during arrest were not serious

Man became aggressive and was arrested following an interaction with police in July

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

‘Bonnie’ and ‘Henry’ among latest litter of service dog puppies

B.C. Alberta Guide Dogs names two pups after provincial health officer

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

BC Greens focus on long-term care reform in first platform promise

Greens have promised to move away from the for-profit care home model

B.C. VOTES 2020: Wilkinson to stop 24-hour camping in city parks

Ban on ‘unsafe roadside panhandling’ to be enforced

Costs climb to more than $100K for BC SPCA to care for animals in B.C. farm seizure

Eight puppies, of the 97 animals seized have now died from parvovirus enteritis

Most Read